Digitalisation, alternative data sets and enterprise data analytics will be critical in decision making for asset managers seeking high returns in the coming year, according to an outlook for the alternative asset management sector by Indus Valley Partners.

Indus Valley , a provider of technology solutions for alternative asset managers, said in a statement that traditional and alternative asset managers will face a number of hurdles in 2018. With pressure growing from investors and regulators, many asset managers will seek new ways to earn high returns through quantitative strategies, alternative data sets and machine learning, it said.

Artificial Intelligence and machine learning will become critical in the search for high returns. Blockchain technology will be used in pilot programs to achieve post-trade operational efficiency and for better regulatory compliance, according to the outlook.

The asset managers, particularly quantitative traders such as hedge funds, will actively look for dark data to make investment decisions. For instance, an investment decision is guided by the sentiment analysis on social media, Indus Valley said.

The asset managers have to process a lot of data, which requires an entirely new set of tools and techniques. Both alternative and traditional managers are facing pressure to innovate and reduce costs of their operating platforms with increased outsourcing, says the outlook.

Founded in 2000, Indus Valley Partners has more than 130 global asset managers and private equity funds among its client base. Its technology is used to manage over $1.3 trillion of global hedge fund assets under management, according to the statement.